Section 517U | Related parties ^F1

(1)For the purposes of this Part a person (“A”) is related to another person (“B”)—

(a)throughout any period for which A and B are consolidated for accounting purposes,

(b)on any day on which the participation condition is met in relation to them, or

(c)on any day on which the 25% investment condition is met in relation to them.

(2)A and B are consolidated for accounting purposes for a period if—

(a)their financial results for a period are required to be comprised in group accounts,

(b)their financial results for the period would be required to be comprised in group accounts but for the application of an exemption, or

(c)their financial results for a period are in fact comprised in group accounts.

(3)In subsection (2) “group accounts” means accounts prepared under—

(a)section 399 of the Companies Act 2006, or

(b)any corresponding provision of the law of a territory outside the United Kingdom.

(4)The participation condition is met in relation to A and B (“the relevant parties”) on a day if, within the period of 6 months beginning with that day—

(a)one of the relevant parties directly or indirectly participates in the management, control or capital of the other, or

(b)the same person or persons directly or indirectly participate in the management, control or capital of each of the relevant parties.

(5)The 25% investment condition is met in relation to A and B if—

(a)one of them has a 25% investment in the other, or

(b)a third person has a 25% investment in each of them.

(6)Section 259NC of TIOPA 2010 applies for the purposes of determining whether a person has a “25% investment” in another person for the purposes of this section as it applies for the purposes of section 259NB(2) of that Act.

(7)In Chapter 2 of Part 4 of TIOPA 2010, sections 157(2), 158(4), 159(2) and 160(2) (which are about the interpretation of references to direct and indirect participation) apply in relation to subsection (4) as they apply in relation to subsection (4) of section 259NA of that Act.